“Buybacks are a way to solve problems for companies when their profit growth slows,” said Tengler. “We aren’t buying Apple for the fundamentals. We buy it because the company will put a floor on the stock every single time it falls.”
Other companies are getting that message as well. Take Broadridge Financial Solutions Inc., the Lake Success, New York-based provider of investor communications and technology products, with a market capitalization of over $23 billion. It plans to spend about $500 million on buybacks during its current fiscal year.
“I expect our shareholder returns will be more weighted toward buybacks as there isn’t a lot to buy in terms of M&A,” Chief Financial Officer Edmund Reese said in an interview. “Buybacks help the stock.”
This article was provided by Bloomberg News.